April 5, 2012

AUGUSTA — Maine has paid hundreds of millions of dollars to organizations run by legislative leaders or the spouses of high-level state officials since 2003. But because of a loophole in ethics law, the public didn’t know about it.

That won’t happen again.

A bill to require disclosure of state contracts with legislators and executive branch officials has sailed to approval through the House and the Senate.

The bill, L.D. 1806, now awaits the signature of Gov. Paul LePage, who said Thursday he will sign it.

“It is reasonable to ask our elected leaders to disclose who is paying them. It is good for the health of our democracy and the people of Maine,” said LePage.

“This will increase trust in the system and ensure that people have the opportunity to take appropriate action and make decisions accordingly.”

LePage proposed the bill after a January investigation by the Maine Center for Public Interest Reporting revealed that organizations run by top legislators or the family members of executive branch officials had received $235 million in state contracts between 2003 and 2010.

In some cases, lawmakers served on the committees that controlled the spending that went to their organizations.

But the spending was never disclosed to the public in state ethics filings.

Sen. Kevin Raye (R-Perry) the senate president, was the lead sponsor of LePage’s bill. He said Thursday that the bill’s passage “means a greater degree of transparency” for citizens, who will be able to spot potential legislative conflicts of interests.

“They can be more confident that they’re aware of the circumstances surrounding individual legislators and their votes in the legislature,” said Raye.

Nathaniel Heller, head of Global Integrity, which co-sponsored a 50-state ethics-in-government study that recently gave Maine an “F,” said, the bill’s passage “is an important step in the right direction when it comes to advancing transparency and accountability in Maine’s government. It’s encouraging to see the governor and other political leaders respond to reporting about governance challenges in the state by adopting specific, evidence-based reforms.

“In an era of limited budgets, it’s especially crucial for Maine’s citizens to know that every dollar spent by their government is being spent wisely,” Heller said.

Current law requires that legislators or high-level state employees report state purchases of goods or services worth more than $1,000 only if they were purchased directly from the individual legislator or family member, not from a corporation or entity for which the legislator or family member works.

For example, $98 million in state contracts went to Portland’s Shalom House between 2003 and 2010. At that time, Sen. Joseph Brannigan (D-Portland) was executive director of Shalom House. He was also chair of the Appropriations and Health and Human Services committees. He was not required to disclose those payments from the state because they went to the organization he ran, not to him directly.

The new law will require legislators, executive branch officials and constitutional officers, such as the attorney general and secretary of state, to report if organizations they or family members were affiliated with — as owners or management-level employees — were paid more than $10,000 annually by the state. LePage’s original bill had proposed a $1,000 reporting trigger, but lawmakers amended that to the higher number.

Rep. Michael Carey (D-Lewiston) proposed an additional amendment, which was adopted, requiring that lawmakers and executive branch officials report income above $2,000 to a corporation of which they are majority owner, even if the lawmaker or official isn’t paid by the corporation.

“If that entity is making money, just the fact that you’re choosing not to pay yourself doesn’t mean that you don’t have to report where that money comes from,” said Carey.

Carey said he proposed the amendment after state Treasurer Bruce Poliquin failed to report almost $10,000 in dues paid to the Popham Beach Club, which he owns. Poliquin later amended his disclosure form to reflect the payments.

The legislation closes another loophole that has allowed lawmakers and high-level executive branch officials to avoid disclosing their income during their last year working in state government. If the disclosure form filing deadline fell after they left office or state employment, they could simply ignore the requirement.